How Much Does Auto Repair Shop Insurance Cost? 2025 Rates

U.S. repair businesses can expect to pay between $720 and $960 annually for comprehensive business insurance, averaging $60 to $80 per month. The primary cost drivers are shop size, services offered, location, equipment value, number of employees, claims history, and coverage limits.

How Much Does Auto Repair Insurance Cost?

In the U.S., auto repair shops usually spend around $720 to $960 a year on a full business insurance package, or roughly $60 to $80 each month. However, this is only a general estimate, your real cost may be more or less depending on your shop’s size, and the services you offer. 

If you run an auto repair shop, having the right insurance is important to protect your business from accidents, property damage, or customer claims. The cost of this insurance can vary widely, so it helps to know what auto repair shops typically pay and what affects the price. This makes it easier to budget and find coverage that fits your needs. 

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Property size and value (affects commercial property coverage)
• Location (affects property coverage)
• Number of customers and daily foot traffic (affects general liability)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Knowing these factors makes it easier to figure out what insurance your auto repair shop needs and what you can expect to pay to keep your business properly protected. 

Average Auto Repair Insurance Costs For Coverage Types

Auto repair shops need several types of insurance to stay protected, and each one comes with its own cost. These prices can vary based on the risks involved in your shop’s work and the amount of coverage you choose. Looking at the average cost for each coverage type can help you understand what you might pay and plan your budget more effectively.

• General liability insurance: $60 per month
• Business owner’s policy: $152 per month
• Workers’ compensation insurance: $155 per month
• Commercial auto insurance: $107 per month

General Liability Insurance

The average cost of general liability insurance for an auto repair shop is about $60 per month.

General liability insurance protects your auto repair shop if a customer or visitor gets hurt on your property or if their belongings are damaged. It is one of the most basic and important types of coverage for auto repair shops because it helps you handle common risks and avoid expensive claims. 

Several factors impact the costs including the business size, location, customer traffic volume, previous claims history, and whether high-risk activities are present, like working with flammable materials or heavy machinery.

Policy limits: $1 million per occurrence and $2 million aggregate.

The per-occurrence limit is the highest amount your insurance will pay for one covered event. The aggregate limit is the total amount the insurer will pay for all claims combined during the policy year. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual premiums for auto repair shop businesses, compiled from both national carriers and regional insurance agencies. They reflect typical coverage limits for small-to-medium repair operations, considering risks such as customer injury, property damage, and liability tied to mechanical work. Actual premiums will vary depending on shop size, number of employees, claims history, services offered (e.g., bodywork, engine repair, tire replacement), and state-specific regulations.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $152 per month for an auto repair shop.

A BOP is a convenient insurance package designed for small to medium auto repair shops. It combines several important types of coverage into one plan, usually at a lower cost than buying each policy separately. A typical BOP includes property insurance, general liability insurance, and business interruption insurance. 

Several factors impact the costs including, the property value, location risk (such as flood or crime rates), business revenue, number of employees, and any optional endorsements like business interruption insurance.

A BOP makes it easier and more affordable for auto repair shops to get essential protection in one simple policy. 

Policy limits: $1 million per occurrence and $2 million aggregate for liability.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average Business Owner’s Policy (BOP) premiums for auto repair shops, which typically combine general liability and commercial property coverage. Figures account for industry-specific risks such as employee injury, equipment damage, fire hazards from machinery, customer vehicle liability, and property coverage for tools and shop facilities. Actual premiums will vary depending on shop size, number of employees, services offered, location, coverage limits, property value, and claims history.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for an auto repair shop business is around $155 per month.

Workers compensation insurance helps protect your employees and your repair shop if someone gets hurt or sick because of their job. Most states require this coverage for businesses with employees, making it essential for keeping your staff safe and your shop financially secure. 

Premiums are influenced by the size of your payroll, the type of work employees perform , your claims history, and any implemented safety programs.

Each state sets rules for workers compensation limits, but usually the insurance covers medical bills and part of the employee’s lost wages, often without a fixed maximum amount. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual Workers’ Compensation premiums for auto repair shop businesses, incorporating state-specific base rates, employee classifications, and payroll ranges typical of both small independent garages and larger multi-location repair chains. Actual premiums will vary depending on your shop’s size, claims history, number of employees, and insurer underwriting practices.

Commercial Auto Insurance

The average cost of commercial auto insurance for an auto repair shop is about $107 per month.

Commercial auto insurance protects vehicles your auto repair shop uses for business purposes, as well as the drivers, if an accident happens. This is important if you have company vans, tow trucks, or any vehicle used to transport tools, parts, or customers’ cars. 

Factors influencing the cost include the number and type of vehicles, how often they are used, and the driving records of employees.

In most states, auto repair shops must have insurance for vehicles they own. If your business uses personal, rented, or leased vehicles for work, you’ll need hired and non-owned auto insurance (HNOA) to make sure those vehicles are covered.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates reflect average annual premiums for auto repair shop businesses that operate service vans, tow trucks, or utility vehicles used for transporting tools, parts, and customer vehicles. Rates are based on blended averages from both small and large agencies, incorporating regional risk exposure, liability coverage levels, and vehicle usage patterns unique to repair operations. Actual premiums will vary depending on shop size, fleet composition, driving history, and insurer underwriting practices.

Auto Repair Shop Business Insurance Costs By Provider

Auto repair shop business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on average annual premiums for auto repair shop businesses, considering both small and large agencies. Coverage typically includes general liability, workers’ compensation, garage liability, commercial property, and equipment breakdown insurance. Actual premiums will vary depending on shop size, number of employees, services offered (e.g., mechanical repair, bodywork, tire services), equipment value, claims history, and coverage limits.

What Factors Impact Your Auto Repair Shop Insurance Costs?

The cost of insurance for an auto repair shop can vary a lot from one business to another. Many factors affect how much you’ll pay, such as the size of your shop, the types of services you offer, and your location. Knowing these factors can help you estimate costs more accurately and make sure your shop has the right protection. 

Type Of Auto Repair Services

The kind of work your shop does affects your insurance costs. A basic oil-change garage usually pays less than a full-service repair center that handles engine rebuilds, electrical work, or body repairs. The riskier or more complex the services, the higher your premium may be.

Use Of Customer Vehicles

If your shop test-drives customer vehicles or provides towing, this adds risk. You’ll likely need commercial auto insurance or coverage for customer vehicles in your care, custody, or control, both of which can raise your insurance cost.

Location

Shops located in high-crime areas, regions prone to natural disasters, or busy urban neighborhoods typically pay more for property and liability insurance. A shop in a low-risk, suburban area may get lower rates.

Size Of Your Operation

Larger shops with more employees, higher customer traffic, and more vehicles on-site are at greater risk for accidents, injuries, or property damage. This increases the cost of general liability, property, and workers’ comp insurance.

Equipment And Property Value

If your shop owns high-value tools, vehicle lifts, diagnostic machines, or other equipment, you’ll need enough property coverage to protect them. The more valuable your assets, the higher your commercial property premium will be.

Claims History

If you’ve filed several insurance claims in the past, insurers may consider your shop high-risk, which can lead to higher rates. A clean claims record can help you qualify for better pricing and discounts.

How To Lower Your Auto Repair Insurance Costs

Insurance for auto repair shops can be expensive, but there are ways to reduce the cost. By understanding how premiums are calculated and taking steps to manage risks, shop owners can save money while still keeping their business protected. 

1. Choose The Right Coverage Type

Make sure you’re only paying for the insurance your shop really needs. Avoid unnecessary policies and select coverage that matches your shop’s size, services, and risks. 

2. Bundle Policies

Combining multiple types of insurance, like property, general liability and business interruptions, into one package (BOP) often saved money compared to buying them separately. 

3. Pay Annually Instead Of Monthly

Paying your insurance premium in a single yearly payment can sometimes reduce costs compared to spreading payments out monthly. 

4. Raise Your Deductible

A deductible is the amount you pay out of pocket before insurance kicks in. Choosing a higher deductible lowers your premiums, though you/ll pay more if you make a claim. 

5. Review Your Coverage Each Year

Check your insurance annually to make sure your policy still fits your shop. Updating coverage for changes in your business, like fewer employees or new equipment, can prevent overpaying.